...Mr Pettis said China must slow from the blistering growth rates of 8pc to 9pc over recent years as it reaches the limits of its investment-led export model. "It will be very bad for commodity exporters," he said.From the Telegraph:
A study by Fitch Ratings concluded that global commodity prices would fall by 20pc if China's growth slows to 5pc next year. China is now the global price setter for oil, coal, and base metals. It was has snapped up 30pc of global copper supply this year....
HSBC's manufacturing index fell from 55.3 to 54.4 in December, the first drop in five months. The slowdown suggests that the authorities are at last gaining traction in their ever-more zealous efforts to stop over-heating, though many analysts say the credit bubble has already gone too far to avoid trouble next year.
The spectre of Chinese monetary tightening has now become the most neuralgic issue in the world economy. There are fears that Beijing may knock away the central prop of global recovery if it misjudges the delicate task.
Capital Economics said Chinese growth has been even stronger than suggested by official data, reaching 10pc in the fourth quarter based on freight levels, electricity use, and building footage. This blistering pace is no longer viewed as benign since it implies that China will have to brake harder.
The central bank has nudged up reserve requirements for banks five times and raised a range of interest rates, including a surprise move over Christmas to lift the one-year lending rate to 5.81pc. Beijing bared its fangs again on Thursday, pushing the money market rate to a three-year high of 6.25pc. Tightening fears has triggered a 12pc fall in the Shanghai stock market since early November. ...MORE